Ever since Jesus appointed Judas to take care of the purse, the church has had problems with finances. The church may have been founded by Jesus, but it is run by men. Will the recent reforms of the Vatican bank end these problems? Probably not, but that does not mean the Vatican will be operating with business as usual.
As with many problems in the church, the problems with Vatican bank find their roots in clericalism and secrecy.
No one enters the seminary with the desire to someday be in charge of church finances. Rather, seminarians want to become pastors. Seminaries also do not do a good job training their students to handle church finances. Priests who do develop expertise in church finances do so on the job. It would be extremely rare to find a priest who took an accounting course, let alone one who has an MBA.
As a result, most priests do not understand basic financial practices. They don't know the right questions, let alone the right answers. At the same time, clericalism means that they have to be in charge of everything. Even if they want to delegate these financial responsibilities to laypeople, they do not know enough to appoint competent people. The temptation is to appoint someone who is deferential or appears pious and trustworthy.
Granted their ignorance of finances, it is no surprise that priests do not do a good job managing church finances.
The second source of problems is secrecy. The fear is that if finances are public, people can second-guess your decisions or put pressure on you for money. The less outsiders know, the fewer questions they can raise. If problems do arise, they can be dealt with without causing scandal.
Clericalism and secrecy were the causes of most of the problems in Vatican finances. For example, the highest authority for the Vatican bank was a board of cardinals with no expertise in finances, let alone banking. They did not know how to supervise a bank. While the person appointed as president of the bank was a layman, he was part time and lacked banking experience. And, of course, until recently, everything about the bank was secret.
The Vatican bank reforms implemented by Pope Francis attack these problems head on.
- Forensic accountants examined in detail accounts with deposits in the bank.
- Accounts were closed if they were not held by Vatican employees or religious organizations.
- Outside accountants (Deloitte & Touche S.p.A.) prepared an audited financial statement, and a detailed financial report was done by the bank. Both were made public.
- All but one of the cardinals on the board that was supposed to supervise the bank were replaced.
- Stricter procedures were put in place so that the bank would operate according to international standards.
- A full-time bank president with experience in financial management, Jean-Baptiste de Franssu, was appointed.
In the past, "financial reform" in the Vatican was done by committees of cardinals and resulted in minor tinkering. The Francis reforms are comprehensive and have been done by lay experts who are creating a system of controls that do not depend on just a few people being honest and competent.
Will this protect the church from future scandals? No. In fact, the immediate future should produce more scandals as these new procedures catch the bad guys. The auditors have made clear that it is not their job to prosecute crooks. Rather, they pass along whatever they learn to the proper authorities in the Vatican for prosecution.
Will Pope Francis give the green light to criminal prosecutions of Vatican employees, including clerics and prelates? As a pope who stresses compassion and mercy, it may be difficult for him to punish offenders. On the other hand, punishing offenders would act as a deterrence to future crime and show that the Vatican is serious about financial reform.
[Jesuit Fr. Thomas Reese is a senior analyst for NCR and author of Inside the Vatican: The Politics and Organization of the Catholic Church. His email address is firstname.lastname@example.org. Follow him on Twitter: @ThomasReeseSJ.]